UPDATE 1-Talisman Energy: readying Iraqi Kurdistan assets for sale

Reuters Staff

3 Min Read

(Adds detail and comment from third paragraph; updates shares.)

CALGARY, Alberta, Aug 12 (Reuters) - Talisman Energy Inc , Canada’s No. 5 independent oil and gas producer, said on Tuesday it still plans to sell all or a portion of its exploration properties in Iraq’s Kurdistan region despite conflict in the area.

The company said it expects to begin a sale process in the next several weeks.

Brent Anderson, a spokesman for Calgary-based Talisman, said an adviser has been selected to handle the marketing of the properties, though he declined to say who had been chosen to oversee the process. The company could sell all or part of its oilfields in the region depending on the amount of interest in the sale.

“We had anticipated going to the marketplace in the third quarter and this process has just started,” Anderson said. “We have an adviser selected and we plan to go into the market with that adviser over the next couple of months.”

The company is starting its sales process even as tens of thousands of people have been driven from their homes in the region and the United States carries out air strikes against the Sunni militants of the Islamic State, who have captured a third of the country.

Talisman has an interest in two oil blocks in Iraq’s Kurdistan region: The Kurdamir block, which it shares with WesternZagros Resources Ltd, and its wholly controlled Topkhana property, where it has just completed the drilling of a promising well. It is now assessing the results of that drilling and has yet to release its findings.

Anderson said the company’s properties have not been affected by the conflict in the region; nonetheless Talisman last week removed most of its personnel from the area.

Major companies such as Chevron Corp and Exxon Mobil Corp have evacuated staff from Kurdistan, while smaller Canadian operators have also suspended operations.

On Monday ShaMaran Petroleum Corp, an Iraqi Kurdistan-focused oil development and exploration company with an interest in the Atrush block, said it had suspended operations at Atrush and significantly reduced staffing levels.

Talisman, which recently seen as a target of a potential takeover by Spain’s Repsol SA, has long said it would like to sell all or part of its Kurdistan operations. However, the timing of the sale, coming during the fighting in the region, may deter some potential buyers.

“It’s probably not as nice of a market as they would have had six months ago,” said Michael Dunn, an analyst with FirstEnergy Capital. “But from Talisman’s perspective their plan always seemed to be to drill that Topkhana well first and see what they have there.”

Talisman shares were up 9 Canadian cents to C$11.56 by early afternoon on the Toronto Stock Exchange.